Reddit Stock (RDDT) Pops on News It’s Being Added to the Russell 2000 Index

The stock of social media company Reddit (RDDT) is up 5% on news that it’s being added to the Russell 2000 index of small-cap stocks.

Reddit, which runs online message boards including the popular WallStreetBets, is slated to become a member of the Russell 2000 index on June 27. The addition is good news for Reddit and its shareholders as it means that mutual funds and exchange-traded funds (ETFs) that track the Russell 2000 will be required to buy the stock.

Reddit went public in March 2024 and since then its share price has more than doubled. However, in recent months, RDDT stock has suffered as the company’s financial results have disappointed and amid signs of slowing growth at the social media concern. As a result, Reddit’s share price has pulled back 33% this year.

Active Users

Despite the pullback, Reddit does continue to grow. The company boasts a 90% gross profit margin and revenue growth of 64% over the last 12 months. Reddit’s message board platform currently has more than 100,000 active communities and 108 million daily active users.

WallStreetBets remains a go-to-site for retail investors and people interested in cryptocurrencies. Inclusion in the Russell 2000 index is expected to enhance Reddit’s visibility and exposure to institutional investors. RDDT stock is currently trading at $110.22 per share.

Is RDDT Stock a Buy?

Reddit stock has a consensus Moderate Buy rating among 21 Wall Street analysts. That rating is based on 12 Buy, eight Hold, and one Sell recommendations issued in the last three months. The average RDDT price target of $149.35 implies 34.73% upside from current levels.

Read more analyst ratings on RDDT stock